Brookfield Corp (BN.TO)

Real estate is going to be challenged. BN is primarily in the property business, which is still booming. Interest rates will be an issue, but it may take 5-10 years to be felt by the big players. Inflation and interest rates will change how people value properties. Work from home won't have as big an impact as believed. 

For growth. A lot to like in terms of maximizing value of assets. BN at the top of the pyramid has some unique arbitrage opportunities among the different assets. Strategic capital allocation benefits. More of a growth orientation, so it retains capital, with a yield of only 0.8%. Shareholder focused. He's quite positive on them.

It's become so complicated. He likes simple, transparent, and can I analyze it? In this environment where interest rates have moved so fast, he doesn't know what credit events are coming. He's standing back. It's a yellow flag right now. Instead, he owns BIP.UN and BEP.UN.

BN vs. BAM

He prefers holding the original Brookfield, whose discount to NAV is steeper than the asset management company. If you want exposure to infrastructure, utilities, etc. then he prefers BN to BAM.

It was downgraded today with investors worried about real estate in Brookfield Corp - BPY. It will probably clean it up and re-buy. It has great assets

Yield is around 1.5%, the lowest in the group. You have to evaluate each company separately. He owns BEP.UN and BIP.UN, as he finds those the most attractive long term. With those two, you tap into the Brookfield global, private equity expertise, with a focus on renewables and infrastructure. BN owns a lot of real estate. BAM is asset management. A complicated structure. You have to analyze the risk/reward to see what's right for you. He's not willing to take that much risk for the top of the house at such a low dividend. One thing is there's been more of a shift in office properties and vacancies post-Covid. Absent a significant change in interest rates or lessening of geopolitical issues, we're heading into a weakening economy. If you have a more positive view on real estate than he does, you may want to look at BN.

Big success story. Parent company. Focused on compounding capital by investing in high-quality investments. Revenue from real estate, private equity, infrastructure, renewables. Expects the smaller dividend yield, because what he wants is capital appreciation. Global powerhouse. Shares came down last year due to rising interest rates and macro headwinds. Good time to buy for the long term. Yield is 1.56%.

BAM and BN Thinks the December drop in share price was due to its competitor BX dropping 35% in 2 months, and that took the entire sector down. Doesn't matter long term. He's sticking with his allocation of BAM and BN. BAM yields over 4%, BN a bit smaller but it owns a big chunk of BAM plus everything it did before. If things start to pick up, well undervalued. Better days ahead on both.